Working People’s Finances: Government Policy

Kim Johnson Excerpts

Tuesday 21st September 2021 Commons Chamber

[Mr Clarke]

We are clear that the right thing to do as we emerge from the pandemic, in which we have spent £400 billion on providing a comprehensive response, is ensure that our NHS is ready to deal with the backlog of cases that has inevitably arisen as well as providing a long-term fix for social care in a broad-based solution, bringing together a progressive tax rise in which the wealthiest pay more and business plays a fair role. I am confident that that is the right thing to do at this time.

Let me remind the House once more of the sheer scale of what this Government have been doing and of our support for the economy. The £400 billion I referenced a moment ago is spending that has been devoted to safeguarding jobs and incomes the length and breadth of the UK. It is spending that has given millions of people financial certainty through a very difficult 18 months.

The furlough scheme has protected 11.6 million jobs—that is equivalent to a third of the entire workforce—and it has paid out £68.5 billion to employers. The self-employment income support scheme has provided £27 billion to almost 3 million people. Businesses have been kept afloat thanks to loan schemes worth £79 billion, in addition to cash grants, VAT cuts and business rates relief, while the most vulnerable have been supported by a temporary uplift to welfare payments. HM Treasury’s own distributional analysis shows that our interventions have supported the poorest working households most as a proportion of income. That list is far from exhaustive, but it shows how the Government have met an extraordinary crisis with an extraordinary package of measures.

[Kim Johnson (Liverpool, Riverside) (Lab)]

In your constituency of Middlesbrough South and East Cleveland—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. Can I just stop the hon. Lady? She must not use the word “your”, but say “in the Minister’s constituency”.

[Kim Johnson]

In the Minister’s constituency of Middlesbrough South and East Cleveland, the child poverty rate is 24.7%, smashing the national average of 19.1%, and up nearly 10% over the past six years. Can the Minister tell us exactly how he intends to justify his own Government’s decisions to hit the pockets of the most vulnerable families and disadvantaged people he represents?

[Mr Clarke]

I am incredibly proud to be part of the extraordinary transformation of Teesside’s economy, which is taking incredible shape under the work of our Mayor, Ben Houchen. Of course, that was reflected in the fact that the Tees Valley voted by 73% to re-elect our Conservative Mayor just this May. Why was that? It happened because of jobs and growth, and hope and pride in place—all the things that this Government are committed to delivering, and all the things that a Conservative Government are doing after years in which Labour neglected areas such as Teesside and left us with no plan, no options and no future.

Peak unemployment is now forecast by the Office for Budget Responsibility as being substantially lower than initially expected. All the evidence now points to a rebounding labour market. Just last week, the Office for National Statistics reported that vacancies are at a record high, while the headline unemployment rate has fallen for seven consecutive months and now stands at 4.6%.

--- Later in debate ---

[Kim Johnson (Liverpool, Riverside) (Lab)]

I must be living in the same alternative universe as my hon. Friend the Member for Liverpool, Wavertree (Paula Barker) because I do not recognise any of the positive spin I have heard from Conservative Members this afternoon. They must be experiencing selective amnesia. Eleven years of draconian austerity measures have attacked some of our most deprived communities, particularly in Liverpool. They have robbed 63%—£450 million—from my great city, which has had a devastating impact on the most deprived.

In my constituency, we have some of the highest child poverty rates in the country, which rocket to 29.3%, compared with the national average of 19.1%. One quarter of the children in my constituency live in absolute poverty. This Government are making decisions to hit the income of those households that are completely unconscionable and must be stopped. Like most of my Labour colleagues, I receive lots of desperate emails. One of my constituents wrote to me to say that the thought of more cuts is making them physically and mentally unwell, and they fear that when these cuts go ahead, they will lose everything they have worked so hard for over the years. Another told me that they have just £100 to survive until their next pay day, which is still 26 days away. They described their heartbreaking daily cycle of hunger, worry and depression.

This Government’s proposals to cut UC, end furlough and hike national insurance, and now the rise in energy prices, is creating a Tory-manufactured cost-of-living crisis. This could not have come at a worse time, as the cost of living is rising. Income is down and workers are doing more work for less pay. We are experiencing fire and rehire, less wages, more work, and worse terms and conditions. How can this Government talk about levelling up while disproportionately taking money out of the pockets of low-paid people who are reliant on welfare payments? In my constituency, more than 6,200 people are in receipt of unemployment-related benefits, including UC, which in reality supports a huge number of working people. That represents about a 50% rise since the start of the pandemic. With the end of furlough, the cut to UC and the hike on taxes on working people, this Government are creating the perfect storm, driving working people further into poverty through a combination of welfare cuts, tax hikes and soaring living costs.

I wish to conclude by paying tribute to Liverpool City Council, the voluntary and community centres, and all of the law centres in my constituency for the amazing work they have done during this pandemic to support those in most need. I dread to think what would have happened without that amazing support.